In this series of articles, Haran Sold provides his thoughts on the state of large-enterprise software, the move toward business cloud delivery models, the role of automation and the impact of legacy thinking.
The nature of IT delivery is changing. Business cloud solutions are now the go-to choice for startups, and they are also drawing the interest of large companies that are used to their established relationships with in-house IT departments, system integrators and legacy platform vendors.
Traditional delivery methods have become outdated
Over the past three decades, Fortune 500 companies typically adopted large-enterprise back-office software and worked closely with platform vendors to create robust systems that increase the service delivery of functions such as enterprise resource planning, finance and supply chain. With traditional project methodologies, systems are specified, responses are requested, contracts are awarded and systems are installed. The service was typically delivered on-premises and maintained by in-house IT on owned infrastructure. Incremental changes, upgrades and expansions were handled the same way, with internal resources working with large platform vendors and partners.
This process was based on the expectation that there would be plenty of time to develop customizations and deliver the solution because nothing was going to change. It was successful in the past because every business was held to the same development and delivery process. No company was getting ahead because everyone was on the same playing field and working with the same vendors.
Cloud services change the status quo
However, the industry has changed in recent years, and the old delivery methodologies are not the only game. The arrival of cloud services and business cloud models has allowed small businesses to achieve the same functionality as large businesses, but without the long delivery horizons and intensive capital investment. A five-person company can now gain access to the same back-office capabilities as a Fortune 500 organization, with negligible costs. As a result, business areas within large organizations are asking for these services from their in-house IT or system integrator, and these providers are unable to deliver.
Businesses are no longer willing to accept the high costs, long timelines and quickly out-of-date tools offered by traditional IT methodologies. When companies bypass internal IT offerings and large platform vendors and opt for agile, instantaneous and continuously improving cloud solutions, they often realize significant savings. Cloud delivery and service methodologies provide business areas with flexible solutions that allow for exploration and experimentation without intensive capital investment. Moving from infrastructure-based investment to cost-per-use and software-as-a-service pricing models provides businesses with the opportunity to build innovative services with less financial risk.
Businesses need to be rapidly responsive in an era where change happens at an increasing pace, and cloud services often help companies meet this goal. New cloud-based methodologies and service models were born from a business-centric view of how to improve IT processes. As a result, companies are increasingly moving away from out-of-date methodologies focused on IT, and business areas are embracing cloud service models. In response to this shift, IT, system integrators and legacy vendors must either change their methodologies or become obsolete.
How have cloud-based services given your company a leg up in the fast-paced business world? Share your story in the comments.
Haran Sold is a self-professed tech fan and geek at heart who is passionate about new and different solutions. This has made him a strong advocate for innovation and a change agent in the world of SaaS ERP. With a broad background from agile startups to executive management in global operations, Haran brings a valuable perspective to this rapidly changing landscape.